The Check Isn't In The Mail

A Depression-era payment system is on the comeback trail--driven by small business. Pre-authorized checking was once a popular way to make regular, fixed payments. It fell out of favor with big companies when electronic banking came along. But electronic funds transfers (EFT) can be costly for small companies, and customers are reluctant to allow electronic withdrawals from their accounts. Pre-authorized checking improves cash flow by eliminating the time lag between billing and payment, and saves EFT fees and invoice costs. It also spares clients the hassle of writing and mailing checks. Market leader MICR Data Systems (212 255-5688) cut 6 million such checks last year, a 100% increase since 1992 that it credits to small-biz growth. National Bank Drafting Systems Inc. (800 968-3771) has licensed operators nationwide, or check the Web for other vendors. Systems differ, and the per-check price ranges from 9 cents to $2.50.

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